We track 13F filings from hedge funds and other notable investors for a variety of purposes, including development of investment strategies (we have found, for example, that the most popular small cap stocks among hedge funds outperform the market by an average of 18 percentage points per year). We can also look at the top picks of individual fund managers, including stocks with relatively high dividend yields, and treat these as “free recommendations” which might be researched further. Here are billionaire Ray Dalio’s Bridgewater Associates’ five largest holdings as of the end of December in stocks whose dividend yields are 3.5% or higher going by current prices and recent dividend policy (or see the full list of stocks Bridgewater reported owning):
The fund increased its holdings of CA, an $11 billion market cap application software company, to a total of 1.1 million shares. CA pays a dividend yield of 4%, following the increase in its quarterly dividend payment in early 2012 to 25 cents per share. We would note, however, that the stock price has fallen 10% in the last year and in its most recent quarter revenue and earnings were both down compared to the same period in the previous fiscal year. Cliff Asness’s AQR Capital Management was also buying CA in Q4 2012, with 2.7 million shares in its portfolio according to its own filing (find Asness’s favorite stocks).
Bridgewater was buying shares of Freeport-McMoRan Copper & Gold (NYSE:FCX) signaling that it approves of the company’s diversification into oil and gas through its acquisitions of two energy companies. The current dividend yield is 3.8%; the stock price reacted negatively to the acquisition announcement on concerns over price and a drift in focus. The earnings multiples are also low, however, and it’s possible that the market overreacted. Billionaire Leon Cooperman’s Omega Advisors was buying Freeport-McMoRan Copper & Gold (NYSE:FCX) in the fourth quarter of 2012 (research more stocks Omega was buying).
Intel Corporation (NASDAQ:INTC) was another of the fund’s high yield stock picks as the technology company pays a dividend yield of just over 4%. Intel Corporation (NASDAQ:INTC) trades at 10 times earnings, whether we use trailing results or analyst consensus for 2014, but it too has been encountering questions about the future of its business and it too has had its stock price decline in the last year (by 25%). Revenue and earnings were down in the fourth quarter of 2012 versus a year earlier, so we would be cautious. Renaissance Technologies, founded by billionaire Jim Simons, was also buying Intel Corporation (NASDAQ:INTC) between October and December (check out Renaissance’s stock picks).
The 13F showed Bridgewater adding shares of Newmont Mining (NYSE:NEM), a global gold and copper miner, for a total of about 290,000 shares at the beginning of January. The current dividend yield at Newmont is a little over 4% as well, though of course the company is dependent on commodity prices. The stock is cheap on an earnings basis as well (the trailing P/E is 11, for example), so if it can sustain its current business it might be an alternative to buying gold directly. First Eagle Investment Management owned 6.3 million shares of Newmont at the end of 2012 (see more stocks First Eagle likes).
Disclosure: I own no shares of any stocks mentioned in this article.
